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The State of Luxury is Strong
Impressions from the FT Business of Luxury Summit in Monte Carlo, Monaco 22-23 May 2023
The penultimate week of May is the time to be in the Côte d’Azur. Between the Cannes Film Festival and the Grand Prix de Monaco, it’s no wonder that the Financial Times (FT) opted to schedule its annual Business of Luxury Summit at the Sporting Monte-Carlo in Monaco.
Two days focused on a diverse array of topics specific to the current state of the luxury industry could easily be overwhelming. But, the FT did a good job organizing and dovetailing sessions, offering a combination of one-on-one conversations and small panels that were relatively easy to digest as a listener.
One compelling idea that resonated throughout the conference, especially on the first day, was a wide-ranging definition of luxury:
Luxury is time.
This encompassed both the concept of time as craftsmanship, in terms of the time it takes to design and craft high-end goods, services, and experiences; but also it comprised time spent with customers, whether in real life or digital, time addressing and understanding their needs and preferences, and time creating beautiful, exclusive high-end experiences.
There were many takeaways from the event. But here are some of the main ones that stood out for our team. (Please note that we arrived late so missed the first half of the first day of sessions.)
Experiential is the new theme for luxury.
Whether you’re talking localization strategies for luxury travel or using generative AI for new beauty experiences, customers crave luxury experiences across channels, not just passive shopping.
Michael Ward, Managing Director of Harrods, commented that the future of bricks-and-mortar luxury is “all about making everything experiential.”
Jane Lauder, Executive Vice President, Enterprise Marketing and Chief Data Officer of The Estée Lauder Companies, noted that “generative AI is a competitive advantage for beauty brands when it comes to digital transformation…. But it only works when you marry human intelligence with artificial intelligence.”
Rachel Koffsky, SVP, International Head of Department, Handbags & Accessories of Christie’s, mentioned their Web3 platform, observing that these technologies have an important role to play for the future of art, in spite of recent dips in the market.
Michala Chatel, Managing Partner, Ultima Collection, commented on the post-pandemic shift from privacy and wellness to experiential and cultural immersion. People want to explore and be immersed in culture.
Tina Edmundson, President, Luxury, Marriott International, said that luxury travel is all about localization and consistency in quality, not a cookie-cutter approach.
Tom Marchant, Owner and Co-Founder of Black Tomato, commented that post-pandemic travel is about “recalibrated travel” that is more value-driven and re-prioritized, rather than “revenge.” He also detailed his company’s storified approach to travel, using “the world of great stories to help enhance” the travel experience.
The new EU regulations for sustainability are coming fast.
Brands need to be prepared. If your brand does not have a strategy in place to understand how the new rules will affect them, they will lose ground.
Jocelyn Wilkinson, Partner and Associate Director, Boston Consulting Group, noted that there are “70 data points” for sustainability to which brands now need to pay heed, including “how clean the data are, how they are stored, and how they are managed” and that brands need a “system to plan and track those data.”
More than one participant said that “the days of greenwashing are at an end.”
Maxine Bédat, Founder and Director, New Standard Institute, noted about her work on the NY Fashion Act that “it’s to make sure the right rules are in place [for sustainability].” This is to ensure that companies disclose their full supply chain, which is so critical for understanding the full impact of fashion on the environment.
Building consumer loyalty for different generations requires different approaches attenuated to how they define luxury and how they shop for it.
Millennials and GenZ can have divergent points of view when it comes to luxury shopping. While Millennials are the main drivers of luxury spending at the moment, GenZ’s power is growing fast.
Auctioneer, art dealer, and curator Simon de Pury noted that there will be more shifts in the art world towards digital, based on an evolution in how people experience and collect art. He commented that people once said that art would never go digital but now it is an integral part of bidding on and buying art. The evolution towards NFTs, digital collectibles, and web3 will continue to form an important piece of the art world.
Shared ownership for art is a compelling model for millennials, who prioritize the value of ownership over any independent capacity.
Luxury brand building is an art that requires a specific approach.
Rodrigo Bazan, CEO of Thom Browne, noted that to build a fashion brand, “It’s about a great designer. Build the business around it, and connect it to the client.”
Ari Bloom, Founder and CEO, A-Frame Brands, talked about the reverse model of applying the principles of design thinking to fashion, putting the consumer before the product, which reverses the traditional model of brand building.
Priya Alhuwalia, Founder and Creative Director, Ahluwalia, had an interesting perspective on the over-compartmentalization of menswear brands into singular categories like “streetwear,” preferring a more flexible description like “ready-to-wear.”
Of course, as an event with many of the world’s top names in luxury, the FT Business of Luxury Summit 2023 was not without the expected glitz and glamour. Night two of the event featured a splashy gala with no less than Prince Albert II of Monaco and Princess Charlene of Monaco as guests. Attendees were treated to a sit-down dinner followed by a live performance from singer-songwriter Beverly Knight with dancing, including an impossible-to-forget moment when the legendary Diane von Furstenberg got up to dance with Prince Albert (and both stayed on the dance floor for quite some time).
With perspectives on luxury ranging from general trends to more focused industry perspectives on travel and watches, the FT Business of Luxury Summit offered breadth and depth on the current state of luxury according to its decision makers and leaders.
The final capstone speaker of the conference was Diane von Furstenberg, who had a lot to say about the invention of the wrap dress and what it takes to thrive as a woman in business. In detailing her journey in fashion, von Furstenberg said frankly, “I put women before fashion…. I always wanted to live a man’s life in a woman’s body.” She emphasized that women in business at any stage of their career should always “go for it” and not hesitate to make their goals happen, which is good advice for anyone looking to get ahead in their career.
The FT Business of Luxury Summit 2024 will be held in Venice, Italy and no doubt will be a similarly grand affair.